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Whitehead Library 
No. 3. 



Wage-Labor 

and 

Capital 



WAGE-LABOR and 
CAPITAL 



BY 

KARL MARX 



WITH AN APPENDIX BY FREDERICK ENGELS. 
TRANSLATED BY J. L. JOYNES. 



vancouver, b.c. 
The Whitehead Estate. 



This series of pamphlets is published 
for the Socialist Party of Canada, under 
the terms of the bequest of the late Com- 
rade George Whitehead, of Vancouver, 
B. C 



FOREWORD. 



The pamphlet, here printed, was first published 
in 1849. It was revised in the year 1891 by 
Engels in order that the text might be brought 
more in accordance with the, by that time, gener- 
ally accepted terminology of the Marxian School. 
Engels, at the same time, wrote an introduction 
explaining these changes in the text, and also sup- 
plying certain historical details which are of general 
interest and help to fix the place of the work in the 
development of the Marxian system. The present 
editors have taken the liberty of placing this intro- 
duction at the end of the book as an appendix. 
This we have done because this pamphlet, addressed 
to working men, was obviously intended for pro- 
paganda purposes and, inasmuch as the introduc- 
tion is somewhat long and discusses a number of 
technical and controversial points, it was thought 
that it would interfere with the main purpose of 
the book and detract from its usefulness, some- 
what after the manner of a long-winded chairman. 

The pamphlet in its original form was Ricardian 
rather than Marxian, and those readers who are 
acquainted with the Hegelian philosophy, to the 
left wing of which school Marx belonged, will not 
be surprised that it has considerable value even for 
advanced students of Marx. 



WAGE-LABOR AND CAPITAL 



WHAT ARE WAGES, AND HOW ARE THEY 
DETERMINED? 



If we were to ask the laborers "How much wages 
do you get?" one would reply, "I get a couple of 
shillings a day from my employer"; another, "I get 
half-a-crown" and so on. According to the differ- 
ent trades to which they belong they would name 
different sums of money which they receive from 
their particular employers, either for working for 
a certain length of time or for performing a certain 
piece of work; for example, either for weaving a 
yard of cloth, or for setting up a certain amount of 
type. But in spite of this difference in their state- 
ments there is one point in which they would all 
agree ; their wages are the amount of money which 
their employer pays them, either for working a 
certain length of time or for a certain amount of 
work done. 

Thus their employer, it would seem, buys their 
labor for money. For money they sell their labor 
to him. But this is mere appearance. What they 
really sell to the employer for money is their labor- 
power. This labor-power the employer buys for 
a day, week, month, etc. And having bought it, 
he uses it by making the laborer work during a 
stipulated period of time. With the same sum 



8 



WAGE-LABOR AND CAPITAL 



for which the employer has bought their labor- 
power, as for instance, with a couple of shillings, 
he might have bought four pounds of sugar or a 
proportionate amount of any other wares. The two 
shillings with which he buys the four pounds of 
sugar are the price of four pounds of sugar. The 
two shillings with which he buys the use of labor- 
power for twelve hours are the price of twelve 
hours labor. Labor-power is therefore as much 
a commodity as sugar, neither more nor less, only 
they measure the former by the clock, the latter 
by the scale. 

The laborers exchange their own commodity for 
their employers* commodity, labor-power for 
money; and this exchange takes place according 
to a fixed proportion. So much money for so long 
a use of labor-power. For twelve hours' weaving, 
two shillings. And do not these two shillings re- 
present all other commodities which I may buy for 
two shillings? Thus the laborer has, in fact, ex- 
changed his own commodity, labor-power, for all 
kinds of other commodities, and that in a fixed 
proportion. His employer in giving him two 
shillings has given him so much meat, so much 
clothing, so much fuel, light, and so on, in exchange 
for his day's work. The two shillings, therefore, 
express the proportion in which his labor-power is 
exchanged for other commodities — the exchange- 
value of his labor-power; and the exchange value 
of any commodity expressed in money is called its 
price. Wage is therefore only another name for 
the price of labor-power, for the price of this 
peculiar commodity which can have no local habi- 
tation at all except in human flesh and blood. 



WAGE-LABOR AND CAPITAL 



9 



Take the case of any workman, a weaver for in- 
stance. The employer supplies him with thread 
and loom. The weaver sets to work, and the thread 
is turned into cloth. The employer takes possession 
of the cloth and sells it, say for twenty shillings. 
Does the weaver receive as wages a share in the 
cloth — in the twenty shillings — in the product of 
his labor? By no means. The weaver receives his 
wages long before the product is sold. The em- 
ployer does not, therefore, pay his wages with the 
money he will get for the cloth, but with money 
previously provided. 

Loom and thread are not the weaver's product, 
since they are supplied by the employer, and no 
more are the commodities which he receives in ex- 
change for his own commodity, or, in other words, 
for his work. It is possible that the employer finds 
no purchaser for his cloth. It may be that by its 
sale he does not recover the wages he has paid. It 
may be that in comparison with the weaver's wages 
he made a great bargain by its sale. But all this 
has nothing whatever to do with the weaver. The 
employer purchases the weaver's labor with a part 
of his available property — of his capital — in exactly 
the same way as he has with another part of his 
property bought the raw material — the thread — 
and the instrument of labor — the loom. As soon as 
he has made these purchases — and he reckons 
among them the purchase of the labor necessary to 
the production of the cloth — he proceeds to produce 
it by means of the raw material and the instruments 
which belong to him. Among these last is, of 
course, reckoned our worthy weaver, who has as 



10 



WAGE-LABOR AND CAPITAL 



little share in the product, or in the price of the 
product, as the loom itself. 

Wages, therefore, are not the worker's share of 
the commodities which he has produced. Wages 
are the share of commodities previously produced, 
with which the employer purchases a certain amount 
of productive labor-power. 

Labor is, therefore, a commodity which its owner, 
the wage worker, sells to capital. Why does he sell 
it? In order to live. 

But the expenditure of the labor-power, labor, is 
the peculiar expression of the energy of the labor- 
er's life. And this energy he sells to another party 
in order to secure for himself the means of living. 
For him, therefore, his energy is nothing but the 
means of ensuring his own existence. He works 
to live. He does not count the work itself as a part 
of his life, rather is it a sacrifice of his life. It is a 
commodity which he has made over to another 
party. Neither is its product the aim of his activity. 
What he produces for himself is not the silk he 
weaves, nor the palace that he builds, nor the gold 
that he digs from out the mine. What he produces 
for himself is his wage; and silk, gold, and palace 
are transformed for him into a certain quantity of 
means of existence — a cotton shirt, some copper 
coins, and a lodging in a cellar. And what of the 
laborer, who for twelve hours weaves, spins, bores, 
turns, builds, shovels, breaks stones, carries loads 
and so on? Does his twelve hours' weaving, spin- 
ning, boring, turning, building, shoveling, and stone- 



WAGE-LABOR AND CAPITAL 



11 



breaking represent the active expression of his life? 
On the contrary. Life begins for him exactly where 
this activity of his ceases — at his meals, on the pub- 
lic-house bench, in his bed. His twelve hours' work 
has no meaning for him as weaving, spinning, bor- 
ing etc., but only as earnings whereby he may ob- 
tain his meals, his seat in the public-house, his bed. 
If the silkworm's object in spinning were to prolong 
its existence as a caterpillar, it would be a perfect 
example of a wage worker. 

Labor-power was not always a commodity. Labor 
was not always wage labor, that is, free labor. The 
slave does not sell his labor to the slave-owner. The 
slave, along with his labor, is sold once for all to 
his owner. He is a commodity which can pass from 
the hand of one owner to that of another. He him- 
self is a commodity, but his labor is not his commo- 
dity. The serf sells only a portion of his labor. He 
does not receive his wages from the owner of the 
soil ; rather the owner of the soil receives a tribute 
from him. The serf belongs to the soil, and to the 
lord of the soil he brings its fruits. The free laborer, 
on the other hand, sells himself, and that by frac- 
tions. From day to day he sells by auction, eight, 
ten, twelve, fifteen hours of his life to the highest 
bidder — to the owner of the raw material, the in- 
struments of work and the means of life ; that is, to 
the employer. The laborer himself belongs neither 
to an owner nor to the soil; but eight, ten, twelve, 
fifteen hours of his daily life belong to the man who 
buys them. The laborer leaves the employer to 
whom he has hired himself whenever he pleases; 
and the employer discharges him whenever he thinks 



12 



WAGE-LABOR AND CAPITAL 



fit, either as soon as he ceases to make a profit out 
of him or fails to get as high a profit as he requires. 
But the laborer, whose only source of earning is 
the sale of his labor-power, cannot leave the whole 
class of its purchasers, that is, the capitalist class, 
and more than that : it is his business to find an em- 
ployer; that is, among this capitalist class it is his 
business to discover his own particular purchaser. 

Before going more closely into the relations be- 
tween capital and wage-labor, it will be well to give 
a brief survey of those general relations which are 
taken into consideration in determining the amount 
of wages. 

As we have seen, wages are the price of a certain 
commodity — labor-power. Wages are thus deter- 
mined by the same law which regulates the price of 
any other commodity. 

Thereupon the question arises : How is the price 
of a commodity determined? 

By what means is the price of a commodity det- 
ermined ? 

By means of competition between buyers and sel- 
lers and the relation between supply and demand- 
offer and desire. And this competition by which 
the price of an article is fixed is three-fold. 

The same commodity is offered in the market by 
various sellers. Whoever offers the greatest ad- 
vantage to purchasers is certain to drive the other 
sellers off the field and secure for himself the great- 
est sale. The sellers, therefore, fight for the sale 
and the market among themselves. Every one of 



WAGE-LABOR AND CAPITAL 



13 



them wants to sell and does his best to sell much, 
and if possible to become the only seller. Therefore 
each outbids the other in cheapness, and a competi- 
tion takes place among the sellers which lowers the 
price of the goods they offer. 

But a competition also goes on among the pur- 
chasers, which on their side raises the price of the 
goods offered. 

Finally competition is going on between buyers 
and sellers; the one set want to buy as cheap as 
possible, the other to sell as dear as possible. The 
result of this competition between buyers and sel- 
lers will depend upon the relations of the two prev- 
ious aspects of the competition; that is, upon 
whether the competition in the ranks of the buyers 
or that in those of the sellers is the keener. Business 
thus leads two opposing armies into the field, and 
each of them again presents the aspect of a battle 
in its own ranks among its own soldiers. That army 
whose troops are least mauled by one another car- 
ries off the victory over the opposing host. 

Let us suppose that there are a hundred bales 
of cotton in the market, and at the same time buyers 
in want of a thousand bales. In this case the de- 
mand is greater than the supply. The competition 
between the buyers will therefore be intense; each 
of them will do his best to get hold of all the hun- 
dred bales of cotton. This example is no arbitrary 
supposition. In the history of the trade we have 
experienced periods of failure of the cotton plant, 
when particular companies of capitalists have en- 
deavored to purchase, not only a hundred bales of 



14 . WAGE-LABOR AND CAPITAL 

cotton, but the whole stock of cotton in the world. 
Therefore, in the case supposed, each buyer will try 
to beat the others out of the field by offering a pro- 
portionately higher price for the cotton. The cot- 
ton-sellers, perceiving the troops of the hostile host 
in violent combat with one another, and being per- 
fectly secure as to the sale of all their hundred 
bales, will take very good care not to begin squab- 
bling among themselves in order to depress the price 
at the very moment when their adversaries are 
emulating each other in the process of screwing it 
higher up. Peace is, therefore, suddenly proclaimed 
in the army of the sellers. They present a united 
front to the purchasers, and fold their arms in 
philosophic content; and their claims would be ab- 
solutely boundless if it were not that the offers of 
even the most pressing and eager of the buyers must 
always have some definite limit. 

Thus if the supply of a commodity is not so great 
as the demand for it, the competition between the 
buyers is keen, but there is none or hardly any 
among the sellers. Result : a more or less important 
rise in the price of goods. 

As a rule the converse case is of much more fre- 
quent occurrence, producing an opposite result. 
Large excess of supply over demand; desperate 
competition among the sellers; dearth of purchas- 
ers; forced sale of goods dirt cheap. 

But what is the meaning of the rise and fall in 
prices? What is the meaning of higher price or 
lower price? A grain of sand is high when exam- 
ined through a microscope, and a tower is low 



WAGE-LABOR AND CAPITAL 



15 



when compared with a mountain. And if price is 
determined by the relation between supply and 
demand, how is the relation between supply and 
demand itself determined. 

Let us turn to the first worthy citizen we meet. 
He will not take an instant to consider, but like a 
second Alexander the Great will cut the metaphysi- 
cal knot by the help of his multiplication table. "If 
the production of the goods which I sell," he will 
tell us, "has cost me £100, and I get £110 by their 
sale — within the year, you understand — that's what 
I call a sound, honest, reasonable profit. But if I 
make £120 or £130 by the sale, that is a higher profit ; 
and if I were to get a good £200, that would be an 
exceptional, an enormous profit." What is it then 
that serves our citizen as the measure of his profit. 
The cost of production of his goods. If he receives 
in exchange for them an amount of other goods 
whose production has cost less, he has lost by his 
bargain. If he receives an amount whose produc- 
tion has cost more, he has gained. And he reckons 
the rise and fall of his profit by the number of de- 
grees at which it stands with reference to his zero 
■ — the cost of production. 

We have now seen how the changing proportion 
between supply and demand produces the rise and 
fall of prices, making them at one time high, at 
another low. If through failure in the supply, or 
exceptional increase in the demand, an important 
rise in the price of a commodity takes place, then 
the price of another commodity must have fallen ; 
for, of course, the price of a commodity only ex- 
presses in money the proportion in which other 
commodities can be exchanged with it. For in- 



16 



WAGE-LABOR AND CAPITAL 



stance, if the price of a yard of' silk rises from five 
to six shillings, the price of silver has fallen in 
comparison with silk ; and in the same way the price 
of all other commodities which remain at their old 
prices has fallen if compared with silk. We have 
to give a larger quantity of them in exchange in or- 
der to obtain the same quantity of silk. And what 
is the result of a rise in the price of a commodity? 
A. mass of capital is thrown into that flourishing 
branch of business, and this immigration of capital 
into the province of the privileged business will last 
until the ordinary level of profits is attained; or 
rather, until the price of the product sinks below 
the cost of production, through overproduction. 

Conversely, if the price of a commodity falls be- 
low the cost of its production, capital will be with- 
drawn from the production of this commodity. 
Except in the case of a branch of industry which 
has become obsolete, and is therefore doomed to dis- 
appear, the result of this flight of capital will be 
that the production of this commodity, and there- 
fore its supply, will continually dwindle until it 
corresponds to the demand ; and thus its price rises 
again to the level of the cost of its production; or 
rather, until the supply has fallen below the de- 
mand; that is, until its price has again risen above 
its cost of production; for the price of any com- 
modity is always either above or below its cost of 
production. 

We see, then, how it is that capital is always im- 
migrating and emigrating, from the province of one 
industry into that of another. High prices bring 
about an excessive immigration, and low prices, an 
excessive emigration. 



WAGE-LABOR AND CAPITAL 



17 



We might show from another point of view how 
not only the supply, but also the demand, is deter- 
mined by the cost of production; but this would 
lead us too far from our present subject. 

We have just seen how the fluctuations of 
supply and demand always reduce the price of a 
commodity to its cost of production. It is true that 
the precise price of a commodity is always either 
above or below its cost of production; but the rise 
and fall reciprocally balance each other, so within 
a certain period, if the ebb and flow of the business 
are reckoned up together, commodities are ex- 
changed with one another in accordance with their 
cost of production; and thus their cost of produc- 
tion determines their price. 

The determination of price by cost of production 
is not to be understood in the sense of the econo- 
mists. The economists declare that the average 
price of commodities is equal to the cost of produc- 
tion ; this, according to them, is a law. The anarchi- 
cal movements in which the rise is compensated by 
the fall, and the fall by the rise, they ascribe to 
chance. With just as good a right, we might con- 
sider, like some other economists, the fluctuations 
as the law, and ascribe the fixing of price by cost 
of production to chance. But if we look closely, 
we see that it is precisely these fluctuations, al- 
though they bring the most terrible desolation in 
their train, and shake the fabric of bourgeois society 
like earthquakes, it is precisely the fluctuations 
which in their course determine price by cost of 
production. In the totality of this disorderly move- 
ment is to be found its order. Throughout these 



18 



WAGE-LABOR AND CAPITAL 



alternating movements in the course of this indust- 
rial anarchy, competition, as it were, cancels one 
excess by means of another. 

We gather, therefore, that the price of a com- 
modity is determined by its cost of production, in 
such manner that the periods in which the price of 
this commodity rises above its cost of production, 
are compensated by the periods in which it sinks 
below this cost, and conversely. Of course this 
does not hold good for one single particular pro- 
duct of an industry, but only for that entire branch 
of industry. So also it does not hold good for a 
particular manufacturer, but only for the entire in- 
dustrial class. 

The determination of price by cost of production 
is the same thing as its determination by the dura- 
tion of the labor which is required for the manu- 
facture of a commodity; for cost of production may 
be divided into (1) raw material and implements, 
that is, products of industry whose manufacture has 
cost a certain number of days' work, and which 
therefore represent a certain amount of work-time 
and (2) actual labor, which is measured by its du- 
ration. 

Now, the same general laws, which universally 
regulate the price of commodities, regulate, of 
course, wages, the price of labor. 

Wages will rise and fall in accordance with the 
proportion between demand and supply, that is, in 
accordance with the conditions of the competition 
between capitalists as buyers and laborers as sellers 
of labor. The fluctuations of wages correspond in 



WAGE-LABOR AND CAPITAL 



19 



general with the fluctuations in the price of commo- 
dities. Within these fluctuations the price of labor is 
regulated by its cost of production, that is, by the 
duration of labor which is required in order to pro- 
duce this commodity, labor-power. 

Now what is the cost of production of labor- 
power? 

It is the cost required for the production of a 
laborer and for his maintenance as a laborer. 

The shorter the time requisite for instruction in 
any labor, the less is the laborer's cost of production, 
and the lower are his wages, the price of his work. 
In those branches of industry which scarcely re- 
quire any period of apprenticeship, and where the 
mere bodily existence of the laborer is sufficient, the 
requisite cost of his production and maintenance 
are almost limited to the cost of the commodities 
which are requisite to keep him alive and fit for 
work. The price of his labor is therefore deter- 
mined by the price of the bare necessaries of his 
existence. 

Here, however, another consideration comes in. 
The manufacturer, who reckons up his expenses 
of production and determines accordingly the price 
of the product, takes into account the wear and 
tear of the machinery. If a machine costs him 
£100 and wears itself out in ten years, he adds £10 
a year to the price of his goods, in order to replace 
the worn-out machine by a new one when the ten 
years are up. In the same way we must reckon in 
the cost of production of simple labor the cost of 
its propagation ; so that the race of laborers may be 



20 



WAGE-LABOR AND CAPITAL 



put in a position to multiply and to replace the worn 
out workers by new ones. Thus the wear and tear 
of the laborer must be taken into account just as 
much as the wear and tear of the machine. 

The cost of production of simple labor amounts 
then to the cost of the laborer's subsistence and pro- 
pagation, and the price of this cost determines his 
wages. When we speak of wages we mean the mini- 
mum of wages. This minimum of wages holds 
good, just as does the determination by the cost of 
production of the price of commodities in general, 
not for the particular individual, but for the species. 
Individual laborers, indeed millions of them, do not 
receive enough to enable them to subsist and prop- 
agate; but the wages of the working class with all 
their fluctuations are nicely adjusted to this mini- 
mum. 

Now that we are grounded on these general laws 
which govern wages just as much as the price of 
any other commodity, we can examine our subject 
more exactly. 

"Capital consists of raw material, implements of 
labor, and all kinds 6i means of subsistence, which 
are used for the production of new implements and 
new means of subsistence. All these- factors of 
capital are created by labor, are products of labor, 
are stored-up labor. Stored-up labor which serves 
as the means of new production is capital." 

So say the economists. 

What is a negro slave? A human creature of 
the black race. The one definition is just as valua- 
ble as the other. 



WAGE-LABOR AND CAPITAL 



21 



A negro is a negro. In certain conditions he is 
transformed into a slave. A spinning- jenny is a 
machine for spinning cotton. Only under certain 
circumstances does it become capital. Outside these 
circumstances it is no more capital than gold is 
intrinsically money, or sugar is the price of sugar. 
In the work of production men do not stand in re- 
lation to nature alone, but also to each other. They 
only produce when they work together in a certain 
way and mutually enter upon certain relations and 
conditions, and it is only within these relations and 
conditions that their relation to nature is defined, 
and production becomes possible. 

These social relations upon which the producers 
mutually enter, the terms upon which they exchange 
their energies and take their share in the collective 
act of production, will of course differ according to 
the character of the means of production. With 
the invention of firearms as implements of warfare 
the whole organization of the army was of necessity 
altered; and with the alteration in the relations 
through which individuals form an army, and are 
enabled to work together as an army, there was a 
simultaneous alteration in the relations of armies 
to one another. 

Thus with an alteration and development of the 
material means of production, i.e., the powers of 
production, there will also take place a transforma- 
tion of the social relations within which individuals 
produce, that is, of the social relations of production. 
The relations of production collectively form those 
relations which we call a society, and a society with 
definite degrees of historical development, a society 



22 



WAGE-LABOR AND CAPITAL 



with an appropriate and distinctive character. An- 
cient society, feudal society, bourgeois society, are 
instances of these sums-total of the relations of pro- 
duction, each of which also marks out an important 
step in the historical development of mankind. 

Now capital also is a social relation of produc- 
tion. It is a bourgeois relation of production, a con- 
dition of the production of a bourgeois society. Are 
not the means of subsistence, the implements of 
labor, and the raw material, of which capital con- 
sists, the results of definite social relations; were 
they not produced and stored up under certain so- 
cial conditions? Will they not be used for further 
production under certain social conditions within 
definite social relations? And is it not just this 
definite social character that transforms into capital 
that product which serves fpr further production? 

Capital does not consist of means of subsistence, 
implements of labor, and raw material alone, nor 
only of material products; it consists just as much 
of exchange-values. All the products of which it 
consists are commodities. Thus capital is not merely 
the sum of material products; it is a sum of com- 
modities, of exchange values, of social quantities. 

Capital remains unchanged if we substitute cotton 
for wool, rice for corn, and steamers for railways ; 
provided only that the cotton, the rice, the steamers 
— the bodily form of capital — have the same ex- 
change value, the same price, as the wool, the corn, 
the railways, in which it formerly embodied itself. 
The bodily form of capital may change continually, 



WAGE-LABOR AND CAPITAL 



23 



while the capital itself undergoes not the slightest 
alteration. 

But though all capital is a sum of commodities, 
that is, of exchange-values, not every sum of com- 
modities, of exchange-values, is capital. 

Every sum of exchange-values is an exchange 
value. For instance, a house worth a thousand 
pounds in an exchange-value of a thousand pounds. 
A penny-worth of paper is the sum of the exchange- 
values of a hundred-hundredths of a penny. Pro- 
ducts which may be mutually exchanged are com- 
modities. The definite proportion in which they 
are exchangeable forms their exchange value, or ex- 
pressed in money, their price. The amount of these 
products can do nothing to alter their definition as 
being commodities, or as representing an exchange 
value, or as having a certain price. Whether a tree 
be large or small, it remains a tree. Whether we 
exchange iron for other wares in ounces or in 
hundredweights, that makes no difference in its 
character as a commodity possessing exchange- 
value. According to its amount it is a commodity 
of more or less value, with a higher or lower price. 

How, then, can a sum of commodities, of ex- 
change-values, become capital ? 

By maintaining and multiplying itself as an inde- 
pendent social power, that is, as the power of a por- 
tion of society, by means of its exchange for direct, 
living labor-power. Capital necessarily presupposes 
the existence of a class which possesses nothing but 
labor force. 

It is the lordship of past, stored-up, realized labor 



24 



WAGE-LABOR AND CAPITAL 



over actual, living labor that transforms the stored- 
up labor into capital. 

Capital does not consist in the fact that stored up 
labor is used by living labor as a means to further 
production. It consists in the fact that living labor 
serves as the means whereby stored-up labor may 
maintain and multiply its own exchange-value. 

What is it that takes place in the exchange 
between capital and wage-labor? 

The laborer receives in exchange for his labor- 
power the means of subsistence; but the capitalist 
receives in exchange for the means of subsistence — 
labor, the productive energy of the laborer, the cre- 
ative force whereby the laborer not only replaces 
what he consumes, but also gives to the stored-up 
labor a greater value than it had before. The laborer 
receives from the capitalist a share of the prev- 
iously-provided means of subsistence. To what 
use does he put these means of subsistence? He 
uses them for immediate consumption. But as 
soon as I consume my means of subsistence, they 
disappear and are irrecoverably lost to me : it there- 
fore becomes necessary that I should employ the 
time during which these means keep me alive in 
order to produce new means of subsistence, so that 
during their consumption I may provide by my 
labor new value in the place of that which dis- 
appears. But it is just this noble reproductive 
power which the laborer has to bargain away to 
capital in exchange for the means of subsistence 
which he receives. To him, therefore, it is entirely 
lost. 

Let us take an example. A farmer gives his 



WAGE-LABOR AND CAPITAL 



25 



day-laborer two Shillings a day. For this two 
shillings the latter works throughout the day on 
the farmer's field, and so secures him a return of 
four shillings. The farmer does not merely re- 
ceive back the value which he had advanced to 
the day laborer; he doubles it. He has spent or 
consumed the two shillings which he gave to the 
day-laborer in a fruitful and productive fashion. 
He has bought for two shillings just that labor 
and force of the day-laborer which provides fruits 
of the earth of twice the value, and turns two shil- 
lings into four. The day-laborer, on the other 
hand, receives in place of his productive force, 
whose effects he has just bargained away to the 
farmer, two shillings ; and these he exchanges for 
means of subsistence ; which means of subsistence 
he proceeds with more or less speed to consume. 
The two shillings have thus been consumed in 
double fashion; productively for capital, since they 
have been exchanged for the labor force which 
produced the four shillings } unproductively for 
the laborer, since they have been exchanged for 
means of subsistence which have disappeared for 
ever, and whose value he can only recover by re- 
peating the same bargain with the farmer. Thus 
capital presupposes wage-labor and wage-labor 
presupposes capital; one is a necessary condition 
to the existence of the other; they mutually call 
each other into existence. 

Does an operator in a cotton factory produce 
merely cotton goods? No, he produces capital. 
He produces values which give fresh command 
over his labor, and which, by means of such com- 
mand, create fresh values. 



26 



WAGE-LABOR AND CAPITAL 



Capital can only increase when it is exchanged 
for labor — when it calls wage-labor into existence. 
Wage-labor can only be exchanged for capital by 
augmenting capital and strengthening the power 
whose slave it is. An increase of capital is there- 
fore an increase of the proletariat, that is, of the 
laboring class. 

The interests of the capitalists and the laborer 
are therefore identical, assert the bourgeoisie 
and their economists. And, in fact, so they are! 
The laborer perishes if capital does not employ 
him. Capital perishes if it does not exploit labor, 
and in order to exploit it, it must buy it. The faster 
the capital devoted to production — the produc- 
tive capital — increases, and the more successfully 
the industry is carried on, the richer do the bour- 
geoisie become, the better does business go, the 
more laborers does the capitalist require, and the 
dearer does the laborer sell himself. 

Thus the indispensable condition of the laborer's 
securing a tolerable position is the speediest possi- 
ble growth of productive capital. 

But what is the meaning of the increase of pro- 
ductive capital? The increase of the power of 
stored-up labor over living labor. The increase of 
the dominion of the bourgeoisie over the laboring 
class. As fast as wage-labor creates its own an- 
tagonist and its own master in the dominating 
power of capital, the means of employment, that is, 
of subsistence, flow back to it from its antagonist ; 
but only on condition that it convert itself anew 
into a portion of capital and thus becomes the 



WAGE-LABOR AND CAPITAL 



27 



lever whereby the increase of capital may be again 
hugely accelerated. 

Thus the statement that the interests of capital 
and labor are identical comes to mean merely this : 
capital and wage-labor are the two sides of one 
and the same relation. The one conditions the 
other, just in the same way that the usurer and the 
borrower condition each other mutually. 

So long as the wage-laborer remains a wage- 
laborer, his lot in life is dependent upon capital. 
That is the exact meaning of the famous com- 
munity of interests between capital and labor. 

The increase of capital is attended by an increase 
in the amount of wage-labor and in the number of 
wage-laborers; or, in other words, the dominion of 
capital is spread over a larger number of indiv- 
iduals. And, to assume even the most favorable 
case, with the increase of productive capital there 
is an increase in the demand for labor. And thus 
wages, the price of labor, will rise. 

A house may be large or small, but as long as 
the surrounding houses are equally small, it satis- 
fies all social requirements of a dwelling place. 
But let a palace arise by* the side of this small 
house, and it shrinks from a house into a hut. The 
smallness of the house now indicates that its occu- 
pant is permitted to have either very few claims 
or none at all; and however high it may shoot up 
with the progress of civilization, if the neighbor- 
ing palace shoots up also in the same or in greater 
proportion, the occupant of the comparatively 
small house will always find himself more uncom- 



28 



WAGE-LABOR AND CAPITAL 



fortable, more discontented, more confined within 
his four walls. 

A notable advance in the amount paid as wages 
presupposes a rapid increase of productive capital. 
The rapid increase of productive capital calls forth 
just as rapid an increase in wealth, luxury, social 
wants, and social comforts. Therefore, although 
the comforts of the laborer have risen, the social 
satisfaction which they give has fallen in compar- 
ison with these augmented comforts of the capital- 
ist, which are unattainable for the laborer, and in 
comparison with the scale of general development 
society has reached. Our wants and their satis- 
faction have their origin in society; we therefore 
measure them in their relation to society, and not 
in relation to the objects which satisfy them. Since 
their nature is social, it is therefore relative. 

As a matter of fact, wages are determined not 
merely by the amount of commodities for which 
they may be exchanged. They depend upon var- 
ious relations. 

What the laborer receives, in the first place, for 
his labor is a certain sum of money. Are wages 
determined merely by this money price? 

In the sixteenth century the gold and silver in 
circulation in Europe was augmented in conse- 
quence of the discovery in America of mines 
which were relatively rich and could easily be 
worked. The value of gold and silver fell, there- 
fore, in proportion to other commodities. The 
laborers received for their labor the same amount 
of silver coin as before. The money price of their 
labor remained the same, and yet their wages had 
fallen, for in exchange for the same sum of silver 



WAGE-LABOR AND CAPITAL 



29 



they obtained a smaller quantity of other commod- 
ities. This was one of the circumstances which 
furthered the increase of capital and the rise of the 
bourgeoisie in the sixteenth century. 

Let us take another case. In the winter of 1847, 
in consequence of a failure of the crops, there was 
a notable increase in the price of the indispensa- 
ble means of subsistence, as corn, meat, butter, 
cheese, and so on. We will suppose that the laborers 
still received the same sum of money for their labor- 
power as before. Had not their wages fallen then? 
Of course they had. For the same amount of 
money they received in exchange less bread, meat, 
etc. ; and their wages had fallen, not because the 
value of silver had diminished, but because the value 
of the means of subsistence had increased. 

Let us finally suppose that the money price of 
labor remains the same, while in consequence of 
the employment of new machinery, or on account 
of a good season, or for some similar reason, there 
is a fall in the price of all agricultural and manu- 
factured goods. For the same amount of money 
the laborers can now buy more commodities of all 
kinds. Their wages have therefore risen, just 
because their money-value has not changed. 

The money price of labor, the nominal amount 
of wages, does not therefore coincide with the real 
wages, that is, with the amount of commodities 
that may practically be obtained in exchange for 
the wages. Thus, if we speak of the rise and fall 
of wages, the money price of labor, or the nominal 
wage, is not the only thing which we must keep in 
view. 



30 



WAGE-LABOR AND CAPITAL 



But neither th-e nominal wages, that is, the 
amount of money for which the laborer sells him- 
self to the employer, nor yet the real wages, that 
is, the amount of commodities which he can buy 
for this money, exhaust the relations which are 
comprehended in the term wages. 

But wages are above all determined by their re- 
lation to the gain or profit of the capitalist. It is 
in this connection that we speak of relative 
wages. 

The real wage expresses the price of labor in re- 
lation to the price of other commodities; the re- 
lative wage, on the contrary, expresses the pro- 
portionate share which living labor gets of the new 
values created by it as compared to that, which is 
appropriated by stored-up labor-capital. We said 
above, on page 10: "Wages are not the worker's 
share of the commodities, which he has produced. 
Wages are the share of commodities previously 
produced with which the employer purchases a cer- 
tain amount of productive labor-power/' But the 
amount of these wages the capitalist has to take 
out from the price which he realizes for the pro- 
duct created by the workman, and as a rule, there 
remains yet for him a profit that is an excess over 
and above the cost of production, advanced by 
him. For the capitalist, then, the selling price of 
the commodity, ^produced by the workman, be- 
comes divided into three parts ; the 1st, to make up 
for the price of the advanced raw material and 
also for the wear and tear of the tools, machinery 
and other instruments of labor also advanced by 
him ; the 2nd, to make up for the wages advanced 



WAGE-LABOR AND CAPITAL 



31 



by him; the 3rd, the excess over and above these 
two parts, constitutes the profit of the capitalist. 
Whereas the first part merely replaces values 
which had a previous existence, that part which 
goes to replace wages, as well as the excess which 
constitutes profits, are, as a rule, clearly taken out 
of the new value created by the labor of the work- 
man, and added to the raw material. And in this 
sense, we may regard both wages and profits, for 
the sake of comparison, as shares of the product of 
the workman. 

Real wages may remain the same, or they may 
even rise, and yet the relative wages may none the 
less have fallen. Let us assume, for example, that 
the price of all the means of subsistence has fallen 
by two-thirds, while a day's wages have only fallen 
one-third, as for instance, from three shillings to 
two. Although the laborer has a larger amount of 
commodities at his disposal for two shillings than 
he had before for three, yet his wages are never- 
theless diminished in proportion to the capitalist's 
gain. The capitalist's profit — the manufacturer's, 
for instance — has been augmented by a shilling, 
since for the smaller sum of exchange-value 
which he pays to the laborer, the laborer has to 
produce a larger sum of exchange-value than he 
did before. The share of capital is raised in pro- 
portion to the share of labor. The division of 
social wealth between capital and labor has be- 
come more disproportionate. The capitalist com- 
mands a larger amount of labor with the same 
amount of capital. The power of the capitalist 
class over the laboring class is increased ; the social 
position of the laborer has deteriorated, and is de- 



32 



WAGE-LABOR AND CAPITAL 



pressed another degree below that of the capitalist. 

What, then, is the general law which determines 
the rise and fall of wages and profit in their recip- 
rocal relation? 

They stand in inverse proportion to one another. 
The share of capital, profit, rises in the same 
proportion in which the share of labor, wages, 
sinks; and inversely. The rise of profit is exactly 
measured by the fall in wages and the fall in pro- 
fit by the rise in wages. 

The objection may perhaps be made that the 
capitalist may have gained a profit by advantageous 
exchange of his products with other capital- 
ists, or by a rise in the demand for his goods, 
whether in consequence of the opening of new 
markets, or of a greater demand in the old mar- 
kets; that the profit of the capitalist may thus in- 
crease by means of over-reaching another capital- 
ist, independently of the rise and fall of wages and 
the exchange-value of labor-power, or that the 
profit of the capitalist may also rise through an 
improvement in the implements of labor, a new 
application of natural forces, and so on. 

But it must nevertheless be admitted that the re- 
sult remains the same, although it is brought about 
in a different way. To be sure profits have not 
risen for the reason that wages have fallen, but 
wages have fallen all the same for the reason that 
profits have risen. The capitalist fcas acquired 
a larger amount of exchange-value with the same 
amount of labor, without having had to pay a 
higher price for the labor on that account; that is 
to say a lower price has been paid for the labor 



WAGE-LABOR AND CAPITAL 



33 



in proportion to the net profit which it yields to the 
capitalist. 

Besides, we must remember that in spite of the 
fluctuations in the price of commodities, the aver- 
age price of each commodity — the proportion in 
which it exchanges for other commodities — is de- 
termined by its cost of production. The over- 
reaching and tricks that go on within the capitalist 
class therefore necessarily cancel one another. Im- 
provements in machinery and new applications of 
natural forces to the service of production enable 
them to turn out in a given time with the same 
amount of labor and capital a larger quantity of 
exchange-values. If, by the application of the 
spinning-jenny, I can turn out twice as much thread 
in an hour as I could before its invention, for in- 
stance, a hundred pounds instead of fifty, then the 
consequence, in the long run, will be that I will re- 
ceive in exchange for them no more commodities 
than before for fifty, because the cost of production 
has been halved, or because at the same cost I can 
turn out double the amount of products. 

Finally, in whatever proportion the capitalist class 
— the bourgeoisie — whether of one country or of the 
world's market — share among themselves the net 
profits of production, the total amount of these net 
profits always consists merely of the amount by 
which, taking all in all, stored-up labor has been 
increased by means of living labor. This sum total 
increases, therefore, in the proportion in which 
labor augments capital ; that is, in the proportion in 
which profit rises as compared with wages. 

Thus we see that, even if we confine ourselves to 



34 



WAGE-LABOR AND CAPITAL 



the relation between capital and wage-labor, the in- 
terests of capital are in direct antagonism to the in- 
terests of wage-labor. 

A rapid increase of capital is equal to a rapid in- 
crease of profits. Profits can only make a rapid 
increase if the exchange-value of labor — the rela- 
tive wage — makes an equally rapid decline. 

Relative wages may decline, although the real 
wages rise together with nominal wages, or the 
money price of labor ; if only it does not rise in the 
same proportion as profit. For instance, if when 
trade is good, wages rise five per cent., and profits 
on the other hand thirty per cent., then the propor- 
tional or relative wage has not increased but de- 
clined. 

Thus if the receipts of the laborer increase with 
the rapid growth of capital, yet at the same time 
there is a widening of the social gulf which separ- 
ates the laborer from the capitalist, and also an in- 
crease in the power of capital over labor and in the 
dependence of labor upon capital. 

The meaning of the statement that the laborer has 
an interest in the rapid increase of capital is mere- 
ly this ; the faster the laborer increases his master's 
dominion, the richer will be the crumbs that he will 
get from his table; and the greater the number of 
laborers that can be employed and called into exist- 
ence, the greater will be the number of slaves de- 
pendent upon capital. 

We have thus seen that even the most fortunate 
situation for the working class, the speediest possi- 
ble increase of capital, however much it may im- 



WAGE-LABOR AND CAPITAL 



35 



prove the material condition of the laborer, cannot 
abolish the opposition between his interests and 
those of the bourgeois or capitalist class. Profit 
and wages remain just as much as ever in inverse 
proportion. 

When capital is increasing fast, wages may rise, 
but the profit of capital will rise much faster. The 
material position of the laborer has improved, but 
it is at the expense of his social position. The 
social gulf which separates him from the capitalist 
has widened. 

Finally, the meaning of the most favorable condi- 
tion of wage-labor, that is, the quickest possible 
increase of productive capital, is merely this: The 
faster the working classes enlarge and extend the 
hostile power that dominates over them the better 
will be the conditions under which they will be 
allowed to labor for the further increase of bour- 
geois wealth and for the wider extension of the 
power of capital, and thus contentedly to forge for 
themselves the golden chains by which the bour- 
geoisie drags them in its train. 

But are the increase of productive capital and the 
rise of wages so indissolubly connected as the bour- 
geois economists assert? We can hardly believe 
that the fatter capital becomes the more will its 
slave be pampered. The bourgeoisie is too enlight- 
ened, and keeps its accounts much too carefully, to 
care for that privilege of the feudal nobility, the 
ostentation of splendor among its retinue. The 
very conditions of bourgeois existence compel it to 
keep careful accounts. 

We must therefore inquire mope closely into the 



36 



WAGE-LABOR AND CAPITAL 



effect which the increase of productive capital has 
upon wages. 

With the general increase of the productive cap- 
ital of a bourgeois society a more manifold accumu- 
lation of labor takes place. The capitalists increase 
in number and size. The increase in the amount of 
capital increases the competition among capitalists. 
The increased size of individual capital gives the 
means of leading into the industrial battlefield 
mightier armies of laborers furnished with more 
gigantic implements of war. 

The one capitalist can only succeed in driving the 
other off the field and taking possession of his 
capital by selling his wares at a cheaper rate. In 
order to sell more cheaply without ruining himself 
he must produce more cheaply, that is, he must in- 
crease as much as possible the productiveness of 
labor. But the most effective way of making labor 
more productive is by means of a more complete 
division of labor, by the more extended use and 
continual improvement of machinery. The larger 
the army of workmen, among whom the labor is 
divided, and the more gigantic the scale on which 
machinery is introduced, the more does the relative 
cost of production decline, and the more fruitful is 
the labor. Thus arises a universal rivalry among 
capitalists with the object of increasing the division 
of labor and machinery, and keeping up the utmost 
possible progressive rate of exploitation. 

Now, if by means of a greater subdivision of 
labor, by the employment and improvement of new 
machines, or by the more skilful and profitable use 
of the forces of nature, a capitalist has discovered 



WAGE-LABOR AND CAPITAL 



37 



the means of producing a larger amount of commod- 
ities than his competitors with the same amount of 
labor, whether it be stored-up labor or direct — if he 
can, for instance, spin a complete yard of cotton in 
the time which it takes his competitors to spin half a 
yard — how will this capitalist proceed to act? 

He might go on selling half a yard at its former 
market price ; but that would not have the effect of 
driving his opponents out of the field and increasing 
his own sale. But the need of increasing his sale 
has increased in the same proportion as his produc- 
tion. The more effective and mo r e expensive means 
of production which he has called into existence 
enable him, to be sure, to sell his wares cheaper, but 
they also compel him to sell more wares and to 
secure a much larger market for them. Our capital- 
ist will therefore proceed to sell his half a yard of 
cotton cheaper than his competitors. 

The capitalist will not, however, sell his complete 
yard as cheaply as his competitors sell the half, al- 
though its entire production does not cost him 
more than the production of half costs the others. 
For in this case he would gam nothing, but would 
only get back the cost of its production. The con- 
tingent increase in his receipts would result from 
his having set in motion a larger capital, but not 
from having made his capital more profitable than 
that of the others. Besides, he gains the ends he 
is aiming at if he prices his goods only a slight 
percentage lower than his competitors. He drives 
them off the field, and wrests from them, at any 
rate, a portion of their sale, if only he undersells 
them. And, finally, we must remember that the 



38 



WAGE-LABOR AND CAPITAL 



price current always stands either above or belozv 
the cost of production, according as the sale of a 
commodity is transacted at a favorable or unfavor- 
able period of business. According as the market 
price of a yard of cloth is above or below its 
former cost of production, the percentage will 
vary by which the capitalist, who has employed 
the new and more productive means of produc- 
tion, sells above his actual cost of production. 

But our capitalist does not find his privilege very 
lasting. Other rival capitalists introduce, with 
more or less rapidity, the same machines and the 
same division of labor on the same or even more 
extended scale; and this introduction becomes gen- 
eral, until the price of the yard of cloth is reduced, 
not only below its old, but below its new cost of 
production. 

Thus the capitalists find themselves relatively in 
the same position in which they stood before the 
introduction of the new means of production; and 
if they are by these means enabled to offer twice 
the amount of products for the same price, they 
now find themselves compelled to offer double the 
amount for less than the old price. Starting from 
the new scale of production the old game begins 
anew. There is greater subdivision of labor, more 
machinery, and more rapid progress in the exploit- 
ation of both. Whereupon competition brings 
about the same reaction against this result. 

Thus we see how the mode and means of pro- 
duction are continually transformed and revolution- 
ized, and how the division of labor necessarily 
brings in its train a greater division of labor; the 



WAGE-LABOR AND CAPITAL 



39 



introduction of machinery a still larger introduc- 
tion; and production on a large scale — production 
on a larger scale. 

This is the law which continually drives bour- 
geois production out of its old track, and compels 
capital to intensify the productive powers of labor 
for the very reason that it has already intensified 
them — the law that allows it no rest, but for ever 
whispers in its ear the words "Quick march!" 

This is no other law than that which, cancelling 
the periodical fluctuations of business, necessarily 
identifies the price of a commodity with its cost of 
production. 

However powerful the means of production 
which a particular capitalist may bring into the field, 
competition will make their adoption general; and 
the moment it becomes general the sole result of the 
greater fruitfulness of his capital is that he must 
now, for the same price, offer ten, twenty, a hun- 
dred times as much as before. But as he must dis- 
pose of, perhaps, a thousand times as much in order 
to outweigh the decrease in the selling price by the 
larger amount of the products sold, since a larger 
sale has now become necessary, not only to gain a 
larger profit, but also to replace the cost of produc- 
tion, — and the implements of production, as we 
have seen, always get more expensive, — and since 
this larger sale has become a vital question, not only 
for him, but also for his rivals, the old strife contin- 
ues, with all the greater violence, the more fruitful 
the previously discovered means of production are. 
Thus the subdivision of labor and the employment 
of new machinery take a fresh start, and proceed 
with still greater rapidity. 



40 



WAGE-LABOR AND CAPITAL 



And thus, whatever the power of the means of 
production employed, competition does its best to 
rob capital of the golden fruit which it produces, by 
reducing the price of commodities to their cost of 
production, — and, as fast as their production is 
cheapened, compelling, as if by a despotic law, a 
continually larger supply of cheaper products to be 
offered at lower prices. Thus the capitalist will 
have nothing for his exertions beyond the obliga- 
tion to produce during the same time an amount 
larger than before, and an enhancement of the diffi- 
culty of employing his capital to advantage. While 
competition continually persecutes him with its law 
of the cost of production, and turns against himself 
every weapon which he forges against his rivals, 
the capitalist continually tries to cheat competition 
by incessantly introducing further subdivision of 
labor and replacing the old machines by new ones, 
which, though more expensive, produce more cheap- 
ly, instead of waiting till competition has rendered 
them obsolete. 

Let us now look at this feverish agitation as it 
affects the markets of the whole world, and we shall 
understand how the increase, accumulation, and 
concentration of capital bring in their train an un- 
interrupted and extreme subdivision of labor, al- 
ways advancing with gigantic strides of progress, 
and a continual employment of new machinery, to- 
gether with improvements of the old. 

But how do these circumstances, inseparable as 
they are from the increase of productive capital, 
affect the determination of the amount of wages? 

The greater division of labor enables one laborer 



WAGE-LABOR AND CAPITAL 



41 



to do the work of five, ten, twenty; it therefore 
multiplies the competition among laborers, five, ten, 
or twenty times. The laborers do not only compete 
when one sells himself cheaper than another, they 
also compete when one does the work of five, ten, 
or twenty; and the division of labor which capital 
introduces and continually increases, compels the 
laborers to enter into this kind of competition with 
one another. 

Further in the same proportion in which the 
division of labor is increased the labor itself is sim- 
plified. The special skill of the laborer becomes 
worthless. It is changed into a monotonous and 
uniform power production, which gives play 
neither to bodily nor to intellectual elasticity. His 
labor becomes accessible to everybody. Competi- 
tors, therefore, crowd around him from all sides ; 
and besides, we must remember that the more sim- 
ple and easily learnt the labor is, and the less it 
costs a man to make himself master of it, so much 
the lower must its wages sink, since they are deter- 
mined, like the price of every other commodity, by 
its cost of production. 

Therefore, exactly as the labor becomes more un- 
satisfactory and unpleasant, in that very proportion 
competition increases and wages decline. The la- 
borer does his best to maintain the rate of wages by 
performing more labor, whether by working for a 
greater number of hours, or by working harder in 
the same time. Thus, driven by necessity, he him- 
self increases the evil consequences of the sub- 
division of labor. So the result is this : the more he 
labors the less reward he receives for it; and that 



42 



WAGE-LABOR AND CAPITAL 



for the simple reason — that he competes against his 
fellow workmen, and thus compels them to com- 
pete against him, and to offer their labor on as 
wretched conditions as he does; and that he thus, 
in the last result, competes against himself as a 
member of the working class. 

Machinery has the same effect, but on a much 
larger scale. It supplants skilled laborers by un- 
skilled, men by women, adults by children; where 
it is newly introduced it throws the hand-laborers 
upon the streets in crowds ; and where it is perfected, 
improved or replaced by more powerful machines, 
discards them in slightly smaller numbers. We 
have sketched above, in hasty outlines, the indus- 
trial war of capitalists with one another; and the 
war has this peculiarity, that its battles are won less 
by means of enlisting than of discharging its indus- 
trial recruits. The generals, or capitalists, vie with 
one another as to who can dispense with the greatest 
number of his soldiers. 

The economists repeatedly assure us that the 
laborers who are rendered superfluous by the ma- 
chine find new branches of employment. 

They have not the hardihood directly to assert 
that the laborers who are discharged enter upon the 
new branches of labor. The facts cry out too loud 
against such a lie as this. They only declare that, 
for other divisions of the laboring class, as, for in- 
stance, for the rising generation of laborers who 
were just ready to enter upon the defunct branch of 
industry, new means of employment will open up. 
Of course that is a great satisfaction for the dis- 
missed laborers. The worshipful capitalists will 



WAGE-LABOR AND CAPITAL 



43 



not find their fresh supply of exploitable flesh and 
blood running short and will let the dead bury their 
dead. This is indeed a consolation with which the 
bourgeois comfort themselves rather than the labor- 
ers. If the whole class of wage-laborers were anni- 
hilated by the machines, how shocking that would 
be for capital, which, without wage-labor, ceases 
to act as capital at all. 

But let us suppose that those who are directly 
driven out of their employment by machinery, and 
also all those of the rising generation who were ex- 
pecting employment in the same line, find some 
new employment. Does anyone imagine that this 
will be as highly paid as that which they have lost ? 
Such an idea would be in direct contradiction to all 
the laws of economy. We have already seen that the 
modern form of industry always tends to the dis- 
placement of the more complex and the higher kinds 
of employment by those which are more simple and 
subordinate. 

How, then, could a crowd of laborers, who are 
thrown out of one branch of industry by machinery, 
find refuge in another without having to content 
themselves with a lower position and worse pay? 

The laborers who are employed in the manufac- 
ture of machinery itself have been instanced as an 
exception. As soon as more machinery is de- 
manded and used in industry it is said that there 
must necessarily be an increase in the number of 
machines, therefore in the manufacture of ma- 
chines, and therefore also in the employment of 
laborers in this manufacture ; and the laborers who 
are employed in this branch of industry will be 
skilled, and, indeed, even educated laborers. 



44 



WAGE-LABOR AND CAPITAL 



Ever since the year 1840 this contention, which 
even before that time was only half true, has lost 
all its specious color. For the machines which are 
employed in the manufacture of machinery have 
been quite as numerous as those used in the manu- 
facture of cotton; and the laborers who are em- 
ployed in producing machines in the face of the 
extremely artful machinery used in this industry, 
have at best been able to play the part of highly 
artless machines. 

But in the place of the man who has been dis- 
charged by the machine perhaps three children and 
one woman are employed to work it. And was it 
not necessary before that the man's wages should 
suffice for the support of his wife and children? 
Was not the minimum of wages necessarily suffic- 
ient for the maintenance and propagation of the 
race of laborers? What else does then the pet 
bourgeois argument prove, but that now the lives 
of four times as many laborers as before are used 
up in order to secure the support of one laborer's 
family. 

To sum up : the faster productive capital increases 
the more does the division of labor and the em- 
ployment of machinery extend. The more the div- 
ision of labor and the employment of machinery ex- 
tend, so much the more does competition increase 
among the laborers, and so much the more do their 
average wages dwindle. 

And, besides, the laboring class is recruited from 
the higher strata of society, as there falls headlong 
into it a crowd of small manufacturers and small 
proprietors, who thenceforth have nothing better 



WAGE-LABOR AND CAPITAL 



45 



to do than to stretch out their arms by the side of 
those of the laborers. And thus the forest of arms 
outstretched by those who are entreating for work 
becomes ever denser and the arms themselves grow 
ever leaner. 

That the small manufacturer cannot survive in a 
contest whose first condition is production on a 
continually increasing scale — that is, for which the 
first prerequisite is to be a large and not a small 
manufacturer — is self-evident. 

That the interest on capital declines in the same 
proportion as the amount of capital increases and 
extends, and that therefore the small capitalist can 
no longer live on his interest, but must join the 
ranks of the workers and increase the number of 
the proletariat — all this requires no further exem- 
plification. 

Finally, in the proportion in which the capitalists 
are compelled by the causes here sketched to exploit 
on an ever increasing scale yet more gigantic means 
of production, and with that object to set in motion 
all the mainsprings of credit, in the same propor- 
tion is there an increase of those earthquakes dur- 
ing which the business world can only secure its 
own existence by the sacrifice of a portion of its 
wealth, its products, and even its powers of produc- 
tion to the gods of Hades — in a word, in the same 
proportion do crises increase. They become at 
once more frequent and more violent; because in 
the same proportion in which the amount of pro- 
duction, and therefore the demand for the extension 
of the market, increases, the market of the world 



46 



WAGE-LABOR AND CAPITAL 



continually contracts, and ever fewer markets re- 
main to be exploited; since every previous crisis 
has added to the commerce of the world a market 
which was not known before, or had before been 
only superficially exploited by commerce. But cap- 
ital not only lives upon labor ? Like a lord, at once 
distinguished and barbarous, it drags with it to the 
grave the corpses of its slaves and whole hecatombs 
of laborers who perish during crises. Thus we see 
that if capital increases fast, competition among the 
laborers increases still faster, that is, the means of 
employment and subsistence decline in proportion 
at a still more rapid rate; and yet, none the less, the 
most favorable condition for wage labor lies in the 
speedy increase of capital. 



APPENDIX. 



The foregoing pages appeared first in the shape of 
leading articles in the columns of the New Rhenish 
Gazette, beginning April 4, 1849. They were based 
on lectures given by Marx in the year 1847, before 
the German Workingmen's Club at Brussels. The 
series of articles begun remained however a frag- 
ment only. The promise "to be continued" (held 
out in the No. 269 at the end of the article) was 
never to be realized owing to the rush of events 
during those days: The invasion of the Russians 
into Hungary, the risings at Dresden, Iserlohn, El- 
berfeld, in the Palatinate and Baden, which brought 
about the suppression of the Gazette itself (May 
19, 1849). Among the papers left by Marx has 
not been found any manuscript containing the con- 
tinuation of the article in question. 

A few editions of "Wage-Labor and Capital" 
have already appeared in pamphlet form, the last 
\n Zurich, Switzerland, in 1884. All these editions 
were exact reprints of the original articles. But as 
this new edition, to be used for the purpose of agi- 
tation, is to be made up of no less than 10,000 
copies, the question had to present itself to my mind, 
whether Marx himself would under these circum- 
stances have approved a mere reproduction of the 
original text. 

As a matter of fact, during the 40's Marx had 
not yet completed his critical study of Political 



48 



APPENDIX. 



Economy. He did this only about the end of the 
50's. Thus all his writings, which have appeared 
before the publication of the first part of his "Cri- 
tique of Political Economy" (1859) differ in some 
points from those published after 1859 ; contain ex- 
pressions and even entire sentences, which from the 
point of view of his later writing, appear rather am- 
biguous and even untrue. 

Now, it goes without saying, that in common edi- 
tions for the general reading public, even such older 
ideas, which constitute, so to say, the logical step- 
ping stones to the final stage of the author's mental 
evolution, may find a legitimate place; that in the 
case of such editions, the author as well as the 
public has an undisputed right to demand an un- 
changed reprint of such older writings, and for 
such an emergency it would never have entered my 
mind to charge even a single word of the original 
text. 

But it is quite a different thing in case the new 
edition is destined primarily and almost exclusively 
for agitation among workingmen. In such a case 
Marx would have undoubtedly brought into accord 
the older exposition, dating back to the year 1849, 
with his later, more mature ideas. And I am sure 
to act in his spirit by making for the present edition 
those slight changes and additions which are requir- 
ed to attain the stated purpose in all principal points. 
I may then tell the reader beforehand : This is the 
pamphlet, not as Marx wrote it in the year 1849, 
but such a one, or nearly such a one, as Marx might 
have written in the year 1891. Moreover, the 
original text can be found in quite a number of old 



APPENDIX. 



49 



copies, and this will do for the time being, until I 
have occasion to embody it as part of a complete 
collection of Marx's writings. 

The changes I have made turn all about one point. 
According to the original text, the workingman 
sells his labor to the capitalist for a certain wage; 
according to the new text what he sells is his labor- 
power. It is concerning this change that I owe 
some explanation: First of all to the workingmen, 
so that they may see that what we are concerned 
with is not at all mere nicety of verbiage, but one 
of the most important problems of Political Econ- 
omy, — and then also to the bourgeois (middle-class 
people), so that they may convince themselves how 
much superior the uneducated workingmen are to 
the conceited "educated class" of society; for while 
to the former the closest and most difficult reason- 
ing can be easily made intelligible, to the latter such 
intricate questions remain a riddle during all their 
life. 

Classical Political Economy accepted from in- 
dustrial practice the traditional conception of the 
manufacturer buying and paying for the labor of 
his workingmen. This conception had proved quite 
sufficient for business purposes, those of book- 
keeping and price-calculation. But transplanted 
naively into Political Economy, it caused there all 
kinds of strange errors and vagaries. 

Political Economy is confronted with the fact 
that the prices of all commodities, among them also 
the price of that which is called "labor," are con- 
stantly changing, rising and falling by reason of the 



50 



APPENDIX. 



most various circumstances, which frequently have 
no connection whatever with the production of the 
commodity itself, so that, as a rule, prices seem 
to be determined by mere accident. As soon then as 
Political Economy assumed a scientific character, it 
became one of its first tasks, to seek the Law hiding 
behind accident, which was apparently ruling the 
prices of commodities, but truly was ruled in its 
turn by this law. Within these oscillations, i.e., the 
up-and-downward movements of prices, the new 
science began to seek the firm central point around 
which these oscillations occur. In a word, starting 
from the prices of commodities, Economics began 
to seek for their regulating law, viz. : The value of 
commodities, by which the price-oscillations might 
be explained, to which they might ultimately be re- 
duced. 

Classical Political Economy found then, that the 
value of a commodity is determined by the labor 
which is embodied in it, in other words, which is 
required for its production. It rested satisfied with 
this explanation, which even we may accept for 
our proximate purposes. (To ward off misunder- 
standings, however, I should remind the reader, 
that this explanation has now become altogether in- 
sufficient.) Marx was the first to analyze in a 
thorough manner the peculiar property of labor to 
create new value, and he found that not all labor, 
which was seemingly or actually necessary for the 
production of a commodity, was really under all 
circumstances adding an amount of value corres- 
ponding to the amount of labor expended. If we 
then follow economists, as Ricardo, in saying plain- 
ly, that the value of a commodity is determined by 



APPENDIX. 



51 



the labor necessary for its production, we are con- 
stantly bearing in mind the reservations made by 
Marx. So much then here for purposes of explan- 
ation. For further particulars I refer the reader 
either to Marx' "Critique of Political Economy'* 
(1859), or to the first volume of his "Capital." 

But no sooner did the economists apply the new 
conception of value, as determined by labor, to the 
commodity "labor" itself, than they began to fall 
from one contradiction into another. How is the 
value of "labor" determined? Answer: By the ne- 
cessary "labor" embodied in it. But how much 
labor is there in the labor of a workingman during 
a period of one day, week, month or year? Of 
course, one day's, one week's, one month's, one 
year's labor. For, if labor is the measure of all 
values, we can express the "value of labor" only in 
terms of labor. Needless to say that we know 
absolutely nothing about the value of one hour's 
labor, if we know only that it equals one hour's 
labor. We have not come a hair's breadth nearer 
the solution of the problem; we are merely turning 
hopelessly in a vicious circle. 

Classical Political Economy thus had to attempt 
another method to solve the problem. It asserted that 
the value of a commodity equals its cost of produc- 
tion. Now then, what is the cost of production of 
labor? In order to answer this question economists 
had to strain logic quite a little. Instead of seeking 
the cost of production of labor itself (which, as a 
matter of fact, can never be found) they investigate 
what is the cost of production of the laborer, and 
this can be found, sure enough. This cost varies 



52 



APPENDIX. 



according to time and circumstances, but given a 
certain condition of society, a certain locality, a 
certain branch of production, this cost is also given, 
at least within narrow limits. We live at present 
under the rule of capitalist production, under which 
a large and steadily increasing class of the popula- 
tion can live only by working for wages for the 
owners of the means of production — the tools, the 
machines, the raw materials and the means of sub- 
sistence. Given such a mode of production the cost 
of the laborer is made up of that sum- total of means 
of subsistence — or their price in terms of money — 
which is normally required to make and keep him 
fit to work, and replace him, in case of old age, 
disease or death by a new laborer, in a word, the 
sum required for the propagation of the working 
class in its required strength. 

Suppose for argument's sake the average money- 
price of the means of subsistence to be two dollars a 
day. Our workman will then receive from his capit- 
alist-employer a daily wage of two dollars. For this 
the capitalist makes him work, say 12 hours a day, 
and he calculates in about the following manner : — 

Suppose the workman, say an engineer, has to 
manufacture a piece of machinery, which he com- 
pletes in one day. The raw material — iron and 
brass in the shape required — to cost 5 dollars. The 
consumption of coal by the steam engine, the wear 
and tear of this engine, that of the lathe and other 
instruments, used by our workman, calculated per 
day and head — to represent one more dollar. The 
daily wage we have assumed to be two dollars. The 
total cost then of the piece of machinery would 



APPENDIX. 



53 



be 8 dollars. The capitalist however calculates that 
the average price which he receives from his cus- 
tomer is 10 dollars, i.e., 2 dollars above the cost ad- 
vanced. 

Whence do these 2 dollars come, which the capi- 
talist pockets? According to what Classical Politi- 
cal Economy says, commodities are sold normally 
at their values, i.e., at prices which correspond to 
the quantities of necessary labor embodied in them. 
The average price of the piece of machinery — 10 
dollars — would thus equal its value, or the amount 
of labor embodied in it. But out of these 10 dol- 
lars, 6 dollars were values already in existence, be- 
fore our engineer began to work. Five dollars were 
contained in the raw material, one dollar either in 
the coal which was burned up during the work or 
in the machinery and instruments which were used 
during the process and by that much became deteri- 
orated in value by losing an aliquot part of their ef- 
ficiency. There remain then 4 dollars, which have 
been added to the value of the raw material. These 
4 dollars, however, according to the very assump- 
tion of our economists, can be due solely to the labor 
applied by the workman to the raw material. His 
twelve hours ' labor has then created a new value of 
4 dollars. The value of his twelve hours' labor, it 
would seem, equals then four dollars. The prob- 
lem, "what is the value of labor/' would thus seem 
to be solved. 

"Stop there !" interjects our engineer. "Four dol- 
lars. Why! I have received but two. My employer 
assures me with all his heart, that the value of my 
twelve hours' work is but 2 dollars, and finds it ridi- 



54 



APPENDIX. 



culous for me to demand four. Well, how do you 
account for it?" 

It appears then, that whereas before, while try- 
ing to define the value of labor, we landed in 
a vicious circle, we have now become hopelessly 
involved in an insolvable contradiction. We have 
been seeking the value of labor, and found more 
than we can use. For the workman the value of 
twelve hours' labor is 2 dollars, for the capitalist 
— 4 dollars, out of which he pays the workman 2 
in the form of wages and puts two into his own 
pocket. Labor then, it appears, has not one, but 
two values and quite different ones too, into the 
bargain. 

The contradiction becomes even more perplex- 
ing in case we reduce the values, as expressed in 
terms of money, to hours of labor. During the 12 
hours of labor a new value of 4 dollars has been 
created : during 6 hours then — one of 2 dollars, the 
exact amount the workman is paid for 12 hours' 
labor. In other words for 12 hours' labor the work- 
man receives as equivalent the product of 6 hours. 
The result then at which we have arrived is the al- 
ternative cpnclusion, either tha,t labor has two 
values, of which one is double the other or that 12 
equals 6. In either case the result is — utter non- 
sense. 

Turn and twist as much as we like we cannot 
extricate ourselves from this contradiction, as long 
as we use the terms "buying and selling labor" and 
"the value of labor''. And this was exactly the fate 
of the economists. The last offshoot of classical 



APPENDIX. 



55 



economics, the Ricardian school, perished mainly for 
the reason that it was unable to solve this contradic- 
tion. Classical Economics had become irretrievably- 
lost in a "cul-de-sac".* The man to find the way- 
out of it was Karl Marx. 

What economists had regarded as the cost of 
production of "labor " was not the cost of labor, but 
that of the living laborer. And what they thought 
the laborer was selling to the capitalist was not his 
labor. 'As soon as his labor really begins, says 
Marx, it ceases to belong to him, and therefore can 
no longer be sold by him/ At best, he is able to sell 
his future labor, i.e., he can assume the obligation 
to perform a definite labor service at a definite time. 
But by doing this he does not sell labor (which is 
only to be performed) ; he transfers to the capitalist 
for a definite time (in case of time- wages) or for 
the sake of a definite labor service (in case of piece- 
wages) the control over his labor-power for a de- 
finite payment; he leases, or rather sells his labor- 
power. This labor-power is coalescent with and in- 
separable from his very person, its cost of produc- 
tion therefore coincides with that of the individual ; 
what the economists called the cost of produc- 
tion of labor is that of the laborer and at the same 
time that of his labor-power. It is thus that we 
are able to go back of the cost of production of labor 
to the value of labor-power and to determine the 
amount of socially necessary labor requisite for 
the production of labor-power of definite quality, 
as Marx has done it in the chapter on "The Buying 
and Selling of Labor-Power" (Cfr. Capital, Vol. I, 
P. II, Chap. VI, Engl. Translation.) 

*Blind alley 



56 



APPENDIX. 



What happens then, when the laborer has sold 
his labor-power to the capitalist, i.e., has transferred 
to him the control over it for a daily or piece-wage, 
agreed upon in advance? The capitalist takes the 
laborer into his shop or factory where there are al- 
ready all things requisite for production, as raw ma- 
terial, accessory materials, (coal, dye-stuffs, etc.) 
tools, machines. Here the laborer begins his toil. 
Suppose his daily wage to be, as before, two dollars, 
no matter whether they are paid to him in the form 
of a daily or piece wage. We again suppose that 
the laborer by his labor during a period of 12 hours 
has added to the raw material consumed — an addi- 
tional value of 4 dollars, which additional value is 
realized by the capitalist when he sells the ready 
product. Out of these 4 dollars he pays the laborer 
2 dollars, but the other 2 he keeps for himself. 
Now if the laborer produces during 12 hours a 
value of 4 dollars, it follows that he produces a 
value of 2 dollars during 6 hours. Consequently 
he has returned to the capitalist the equivalent of 
his wage of 2 dollars, after having worked for him 
but six hours. After six hours of labor they have 
squared accounts, neither owes the other a single 
cent. 

"Beg your pardon," interjects the capitalist now. 
I have hired the laborer for an entire day, for 12 
hours. Six hours are but half a day. Continue your 
labor until the other six hours are over, only then 
we shall be square ! As a matter of fact, the lab- 
orer has to live up to the "voluntarily" entered 
agreement, by which he had bound himself to work 



APPENDIX. 



57 



full 12 hours in exchange for labor-product which 
costs but six hours of labor. 

The same holds good in the case of piece- wages. 
Suppose our laborer produces 12 pieces of a certain 
commodity during 12 hours. The cost of the raw 
material, the wear and tear of the machinery 
amounts to say $1.33% cents, the piece sells at 
$1.66% cents. In such a case, the capitalist, given 
the same terms as above, will pay the laborer a little 
over I6V2 cents a piece, for 12 pieces — 2 dollars, 
for which the laborer has toiled 12 hours. The 
capitalist receives for the 12 pieces 20 dollars; out 
of these — 16 dollars go for raw materials and wear 
and tear; out of the balance of 4 dollars, 2 go for 
wages and 2 are pocketed by the capitalist. The 
result, then, is the same as above. In this case as 
well as in the first, the laborer works six hours for 
himself, i.e., in return for his wage (6 hours out 
of each 12 hours) and six hours for the capitalist. 

The difficulty, which brought to grief even the 
best economists so long as they started their reason- 
ing with the value of "labor," disappears as soon as 
we start in its stead with the value of labor-power. 

Labor-power is a commodity in our present capi- 
talist society, to be sure, a commodity like any 
other, but still a peculiar commodity. It has the 
peculiar "quality of being a power that generates 
value, or of being the source of value, and what is 
more, of being, with proper treatment, the source 
of more value than is embodied in itself. 

As a matter of fact, productive efficiency has 



58 



APPENDIX. 



nowadays reached such a stage that human labor- 
power produces during one day not only a greater 
value than that which it possesses and costs, but also 
with each scientific discovery, with each new tech- 
nical invention, the excess of its daily product over 
and above its daily cost increases; in other words, 
that part of the work-day during which the laborer 
is working merely to reproduce the equivalent of his 
daily wage is constantly decreasing, while that part 
is increasing, during which the laborer has to make 
a free gift of his labor to the capitalist, for which 
he is not paid at all. 

And this is the economic constitution of our en- 
tire modern society: it is the working class alone 
which produces all values. For value is merely 
another expression for labor, that expression by 
which in our present capitalist society is designated 
the quantity of socially necessary labor embodied 
in a definite commodity. But the values produced 
by the laborers do not constitute their property. 
They are the property of the owners of the raw 
material, the machines and the articles advanced 
to the laborers, the possession of which enables 
these owners to purchase the labor-power of the 
working class. Out of the entire mass of produce 
created by the working class, it receives back but 
a small share. 

And as we saw just now, the other share, which 
the capitalist class retains for itself, or, at worst, has 
to divide with the landlord-class, is becoming great- 
er with each new invention and discovery, while 
the share falling to the working class (calculated 



APPENDIX. 



59 



per head) either rises but slowly and insignificantly, 
or does not rise at all, and at times may even fall. 

But this continuously accelerated rush of inven- 
tions and discoveries, this unprecedented daily 
growth of the productivity of human labor, will in 
the long run cause a conflict by which our present 
capitalist economy must perish. On the one side un- 
fathomable wealth and a superabundence of pro- 
ducts which the purchasers cannot find use for. On 
the other side, the great mass of society, proletariz- 
ed, turned into wage-workers, and thereby made un- 
able to acquire that superabundance of products. 
The cleavage of society into a small, extremely rich 
class, and a great non-possessing class of wage- 
workers, causes this society to suffocate from its 
own superabundance, whereas the great majority 
of its members are hardly, or not at all, protected 
against extreme want. 

Such • a state becomes every day more absurd 
and unnecessary. It must be removed, it can be 
removed. A new order of society is possible in 
which the present class differences will be a matter 
of the past and where — perhaps after a short, not 
quite satisfactory, but morally very useful transi- 
tion period — by means of designed utilisation and 
further improvement of the then existing vast pro- 
ductive power of all members of society, with equal 
obligation to work, will be given, in equal degree 
and in constantly growing abundance, the means 
to live and to enjoy life, to develop and exercise all 
physical and intellectual capacities. And that the 
workingmen are more than ever determined to 



60 



APPENDIX. 



achieve for themselves such an order of society — 
to this will bear testimony, on either side of the 
ocean, the dawning first of May and the Sunday 
after, the third of May. 

FREDERICK ENGELS. 



London, April 30, 1891. 



NOW ON SALE 

Uniform with this 

The Communist Manifesto 

KARL MARX AND FRED. ENGELS 

Socialism: Utopian and 
Scientific 

FREDERICK ENGELS 



To be issued in near future: — 

MARXISM & DARWINISM 

VALUE, PRICE & PROFIT 



.A. Pannekoek 
: Marx